The design district of Charleston stands as an evolving area east of Hampton Park comprising properties such as 724 King St. The 4,001-square-foot building at Congress and King streets boasts two decorated upstairs apartments. Tavern and convenience store are ground floor possibilities. Sale price? $2.5 million.
"This opportunity captures the best Charleston offers past and present combined," the listing points out. "It's turnkey, already remodeled and upgraded, well over $800,000 put into it," says James A. Dingle, of Coldwell Banker Commercial Atlantic. A portion of the retail space can be leased for $32 a square foot. Rental estimates for the 1,051- and 916-square-foot upstairs residences are $2,200-$2,500 a month. "You get a key and can run with it," he says.
Lately, a host of local property holders are finding ways to boost cash flow and develop steady income by renting out retail places, condos and homes; or profiting as residences and buildings appreciate in value, investment observers note.
"There are various types of investment properties," says Gus Bright, a Realtor with Akers Ellis who specializes in properties on Kiawah and Seabrook islands. "Every one is unique."
Bright lists at least three island homes and villas that would be ripe for investment, including:
- The five-bedroom 328 Moon Tide Lane house, built in 2016 with "an open floor plan, dual master suites, five bedrooms and expansive views overlooking the Kiawah River." Priced at $2,729,000, the residence "would make an excellent investment property," he says.
- A golf-course-sided mansion sold earlier this year at 117 Bufflehead Drive represents a "perfect example of an investment home that is also used for rentals. It is a big producer," he says, manning five bedrooms, five bathrooms and a pool while close to the beach.
- The 4838 Green Dolphin Way residence at Turtle Cove Villa, priced for sale at $469,000, stands out as a "very popular rental two bedroom (and two bath) villa with lagoon view, close to the beach. "Turtle Cove is one of the most popular rental areas on Kiawah Island," he says.
Real estate, Bright notes, can be an attractive investment for people "who have extra liquidity, long-term rental property" and no or limited debt. Properties don't have to be super-high valued; some areas around Charleston have neighborhood mobile home parks that the owners can collect payments and over time finance individual sales to manufactured housing tenants.
At upscale beachside residences Kiawah and Seabrook islands and the Isle of Palms, meanwhile, "the rental business is prolific," he says. Astute buyers purchased oceanfront homes after the real estate market fell in the late 2000s and early 2010s. From 2009 to 2013, "some people got good buys," he says.
Bright notes, however, that rental income isn't a financial panacea. "One of the misconceptions with investors is they think they can get enough rent to pay a mortgage," he says. That's unlikely unless the owner can generate $100,000 or more in rental income a year, he notes. The six figure total actually is possible for homes leased out during prime warm weather months at as high as $20,000 a week, the Realtor says.
One bit of advice from Bright is to look at investment income as a sideline or buffer, not as a pile of cash to live on permanently for years.
"I've learned to tell people when they purchase investment property at the beach," a long-time rental strategy works best to generate positive cash flow, Bright says. To have a "family connecting place" at the beach, in which generations can gather on a regular basis, then the house can be leased to cover carrying costs and possibly end up with some cash left over.
National reports note the interest of real estate as an investment and how to make money over time or in a shorter-term but consistent way.
"If you aim for long-term growth, equity and profit, you'll need to look beyond tangible factors like square footage and style," Internet personal-finance site WalletHub says in a recent report. "Those factors certainly drive up property values. From an investor's standpoint, though, they hold less significance than historical market trends and the economic health of residents."
Dingle, of Coldwell Banker Commercial Atlantic, says retail properties including with living spaces on the second floor, are becoming available in the upper reaches of peninsula Charleston. "Everyone can't be on King Street," he says.
Activity has fallen off some during the late fall months. "Things are staying on the market a little bit longer (into) the holiday season," he says. Still, the Charleston investment scene has matured as outside buyers discover the city. "This market has opened to the world," he says. "You have investors already here."
The 724 King St. property, built in 1973, underwent a major renovation last year. A possible use would be an eatery on the street level with the owners living on the second floor, a so-called "live-work" setting. They can head downstairs for "a sandwich and hot dog, coffee, nice bar," Dingle says.
"That's serious live, work and play."
For more information and photos, go to www.postandcourier.com/business/real_estate/jim-parker.
Reach Jim Parker at 843-937-5542 or email@example.com.